Small hydropower deserves more support

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With the right support, small-scale hydropower could be a cheap and clean fuel for development, says energy advisor Teodoro Sanchez.

During the past three decades, hydropower plants have been criticised for their environmental impact. But although large-scale plants have impacts, small hydro systems have no need for large dams, roads and other major infrastructure. In fact, most such plants are 'run-of-the-river' systems that rely more on gravity and nature than concrete and infrastructure.

Given the right resources, small hydropower schemes are generally among the best options for providing energy to isolated off-grid areas. But despite the benefits of this proven technology, the potential for small hydro schemes has been neglected, especially for schemes generating less than 500 kilowatts.

Not new, just neglected

Hydropower technology is certainly not new. It has been used for hundreds of years to turn shafts, and has generated electricity right from the beginning of the electricity era. The very first house to be powered by micro hydro was in Northumberland, United Kingdom, in 1878. Large hydroelectric plants already supply nearly 20 per cent of the world's total electricity consumption.

Small hydropower can provide clean energy from indigenous resources. It can continuously and reliably supply energy for key services such as health and education centres, and for purifying and pumping drinking water.

And hydropower is affordable. Once installed, the running costs of small hydro schemes are very low, meaning electricity can be supplied for 24 hours a day. Compared with other small-scale electricity generating options, such as solar, wind and biogas, hydropower is usually the cheapest option per kilowatt-hour. That makes it appealing for rural enterprises that need lots of energy and a secure supply. For example, it has proved effective in powering chicken farms, milk chilling and small mining businesses.

And of course, it produces no greenhouse gas emissions.

Yet rather than growing, interest in small hydropower has declined dramatically in recent decades. That's partly because of the swift progress of other technologies and the mass production of small diesel sets that are both portable and easily installed. It is also because of the success of large power generation schemes and large grids in bringing down costs.

River revival

More recently the energy crisis, growing awareness of climate change, energy shortages in developing countries and commitments to achieve the Millennium Development Goals have led to a rethink by the UN Development Programme, the World Bank and a number of governments. Planners and policymakers are being urged to review all available energy options, especially those decentralised sources (including wind, solar, hydro and biofuels) that could help to supply poor and isolated communities with the energy needed for development.

There is now a strong case for development aid agencies to give small hydro much more attention, and for governments to implement policies that support the construction, dissemination and use of hydro-energy resources.

Some international cooperation organisations, such as the UK-based Practical Action (where I work as an energy advisor) and the German aid organisation GTZ have already promoted small hydropower systems in a number of countries. These include Kenya, Nepal, Peru and Zimbabwe.

And there are some indications that developing countries are paying more attention to small hydropower schemes. For example, the European Union Energy Facility fund has supported a few projects in Africa. But much more is needed.

Overcoming the Barriers

A number of barriers still have to be overcome. Most developing countries lack the capacity to design, implement and manage small hydropower schemes. And an absence of appropriate financial mechanisms prevents small-scale farmers, rural businesses or just groups of people from implementing their own schemes. Most simply cannot afford the high up-front investment costs unless policies and regulations are in place to support hydropower.

Another problem is that small hydropower schemes are site-specific and are built individually. That makes them unattractive to large companies interested in mass energy production and fast market penetration. In contrast, solar photovoltaic (PV) systems can be mass produced. So, despite the huge cost per unit energy produced by solar PVs, many large multinational companies promote it.

To speed up uptake of hydro energy in developing countries, considerably more effort and resources need to be put into building local capacity to design, manufacture and run small hydro schemes.

And countries need policy regulations that provide incentives for private investment in small hydro. One such mechanism, where a grid connection is possible, is a Feed-in Tariff (FiT) that pays very small-scale renewable energy generators (householders and communities) a guaranteed price for electricity they supply to the grid. Such schemes have become very popular in Europe, especially for photovoltaic and wind energy systems.

Also required are financial mechanisms, such as revolving funds, to motivate entrepreneurs to invest in small hydro and associated businesses. Technical standards for small isolated schemes should also be developed and promoted — as should governance and management models that involve all stakeholders. Small private businesses need to be fostered.

Where Practical Action has introduced small-scale hydropower schemes, it has also worked on building the local and national capacity to produce equipment and spare parts, and to design, implement and operate small hydropower systems. We've looked at management models and energy literacy within stakeholder groups and users, and taken other steps to make it easier for small hydropower to become an energy option for development.

What is needed now is a much wider assessment and dissemination of best practice. How can sustainable hydro schemes be best promoted in developing countries? What is the best way to transfer know-how between countries in the South? With concerted action and cooperation, small-scale hydro power really could take its rightful place as a cheap clean fuel for development.

Teodoro Sanchez is an energy technology and policy advisor for the development charity Practical Action.